HEARTLAND GROUP OF COMPANIES INC
10QSB, 1997-10-14
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES
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                	U.S. Securities and Exchange Commission
	                        Washington D.C. 20549

                            	Form 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
  For the quarterly period ended                        August 31, 1997         

Commission file number                          33-65292C                    
   
                      THE BANC STOCK GROUP , INC.                               
    (Exact name of small business issuer as specified in its charter)

           FLORIDA                                 65-0190407                  
   (State of incorporation)              (IRS Employer Identification No.)

             1105 Schrock Road, Suite 437, COLUMBUS, OHIO  43229                
                  	(Address of principal executive offices)

                             (614) 848-5100                                     
	                       (Issuer's telephone number)

  Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days.
Yes  X     No        

  State the number of shares outstanding of each of the issuer's classes of 
common equity, as of September 30, 1997:
CLASS						                                        NUMBER OF SHARES
Class A shares, No Par Value		              	          7,931,717
Class C shares, No Par Value					                        480,000

	TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE)

Yes  X                 			No                          


              	THE BANC STOCK GROUP, INC. AND SUBSIDIARIES
                               	INDEX

                                              PAGE
Part I Financial Information:					  

Item 1.  Consolidated Financial Statements		  3-7

Notes to Consolidated Financial Statements		  8-17

Item 2.  Management's Discussion and Analysis
   of Financial Condition and Results of
   Operations					                            18-22

Part II Other Information:

Item  1 through Item 6					                   23-24

Signatures								                            25



               	THE BANC STOCK GROUP, INC. AND SUBSIDIARIES

                                  	PART I

                           	FINANCIAL INFORMATION

ITEM 1.	Financial Statements

The accompanying consolidated financial statements of The Banc Stock Group, 
Inc., formerly, Heartland Group of Companies, Inc., are unaudited but, in the 
opinion of management, reflect all adjustments (which include only normal 
recurring accruals) necessary to present fairly such information for the 
periods and at the dates indicated and to make the consolidated financial 
statements not misleading.  The results of operations for the six months 
ended August 31, 1997 may not be indicative of the results of operations for 
the year ending February 28, 1998.  Since the accompanying consolidated 
financial statements have been prepared in accordance with Item 310 of 
Regulation S-B, they do not contain all information and footnotes normally 
contained in annual consolidated financial statements; accordingly, they should 
be read in conjunction with the consolidated financial statements and notes 
thereto appearing in the Company's Annual Report.

                THE BANC STOCK GROUP, INC. and SUBSIDIARIES
               CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                         AS OF AUGUST 31, 1997

                              (UNAUDITED)

      ASSETS
      Cash                                                   $    118,639
      Securities owned:
        Marketable equity securities, at market value          10,049,818
        Not readily marketable equity securities at estimated f   797,974
      Mortgage participation notes                                100,000
      Accounts receivable:
        Affiliates                                                147,977
        Pending securities settlements                            108,710
      Notes and interest receivable                                55,999
      Equity investment in Banc Stock Exchange of America         526,010
      Property and equipment, net of accumulated depreciation 
        of $196,281                                               165,194
      Goodwill, net of accumulated amortization of $211,385       418,582
      Deposits and other                                          215,365

          Total assets                                       $ 12,704,268

      LIABILITIES

      Margin accounts payable to broker-dealers              $    579,717
      Unearned commisions                                          83,300
      Accounts payable to broker-dealers and other                 52,842
      Deferred taxes                                              300,000
      Accrued expenses                                            674,299

          Total liabilities                                     1,690,158

      SHAREHOLDERS' EQUITY

      Preference stock, 50,000,000 shares authorized,               -
          none issued or outstanding
      Common stock:
        Class A, no par value, 149,400,000 shares
          authorized, 8,234,762 shares issued
          and 7,931,717 shares outstanding                      9,102,556
        Class C, no par value, 480,000 shares
          authorized, issued and outstanding                         -
        Treasury stock, at cost
          (303,045 Class A shares)                               (385,403)
      Retained earnings                                         2,296,957

          Total shareholders' equity                           11,014,110

          Total liabilities and shareholders' equity         $ 12,704,268

The accompanying notes are an integral part of these consolidated financial 
statements.

            THE BANC STOCK GROUP, INC. and SUBSIDIARIES
                 CONSOLIDATED STATEMENTS of INCOME
     FOR THE THREE MONTHS and SIX MONTHS ENDED AUGUST 31, 1997 and 1996

                           (UNAUDITED)

                                 6 Months Ended           3 Months Ended
                             AUGUST 1997  AUGUST 1996 AUGUST 1997 AUGUST 1996
REVENUES:

   Principal transactions: $  2,291,974 $  762,938  $ 1,456,648 $   362,155
   Commission revenue           888,396    663,683      618,218     425,643
   Agency Fees                        0     14,270            0      14,270
   Dividends                     85,445     66,278       48,281      44,705
   Interest                      16,725     18,480        6,476       9,049

     Total revenues           3,282,540   1,525,649    2,129,623     855,822

EXPENSES:
   Brokers' commission          507,803    357,264      314,572     236,770
   Salaries, benefits and 
     payroll taxes              491,081    185,145      367,512      89,475
   Interest                      40,180     20,056       19,375      13,749
   General and administrative   557,867    437,145      292,792     243,975

     Total expenses           1,596,931    999,610      994,251     583,969

INCOME  BEFORE TAXES          1,685,609    526,039    1,135,372     271,853

INCOME TAX PROVISION            300,000       -         300,000       -

INCOME BEFORE EQUITY IN NET 
   EARNINGS OF AFFILIATED CO.    36,850      3,970       25,770       6,900

NET INCOME                 $  1,422,459 $  530,009  $   861,142 $   278,753

   WEIGHTED AVERAGED SHARES,
     COMMON AND COMMON
     STOCK EQUIVALENTS        8,516,533   8,411,677   8,622,955   8,411,677

   PRIMARY AND FULLY DILUTED
     EARNINGS 
     PER COMMON SHARE      $       0.17 $     0.06  $      0.10 $      0.03

The accompanying notes are an integral part of these consolidated financial 
statements.

              THE BANC STOCK GROUP,INC. and SUBSIDIARIES
        CONSOLIDATED STATEMENTS of CHANGES in SHAREHOLDERS' EQUITY
               FOR THE SIX MONTHS ENDED AUGUST 31, 1997

                             (UNAUDITED)

                                     Treasury        Retained
                 Class A    Class C    Stock         Earnings       Total

Balance 2/28/97 $9,102,556     -     ($385,403)      $874,498     $9,591,651


Net income            -        -         -          1,422,459      1,422,459


Balance 8/31/97  $9,102,556    -     ($385,403)    $2,296,957    $11,014,110


The accompanying notes are an integral part of these consolidated financial 
statements.

               THE BANC STOCK GROUP, INC. and SUBSIDIARIES
                  CONSOLIDATED STATEMENTS of CASH FLOWS
            FOR THE SIX MONTHS ENDED AUGUST 31, 1997 and 1996

                                (UNAUDITED)

                                                      1997          1996
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                    $   1,422,459 $     530,009
  Adjustments to reconcile net income 
    to net cash provided by (used in) operating activities:
    Depreciation and amortization                      36,838        32,104
    Deferred taxes                                    300,000           -
    Equity in earnings of Banc Stock Exchange of A    (36,850)       (3,970)
    (Increase) decrease in certain assets-
       Accounts receivable                            (64,417)      (52,812)
       Securities owned, net                       (1,372,267)   (1,335,172)
       Other assets                                  (129,248)       (2,955)
    Increase (decrease) in certain liabilities-
       Accounts payable to broker-dealers and othe     31,875       (26,955)
       Unearned commissions                            83,300           -
       Accrued expenses and other                     105,329        27,932
         Net cash provided by (used in) operating     377,019      (831,819)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Collections of notes receivable                      15,153        36,300
  Issuance of notes receivable                        (48,306)       (7,070)
  Purchase of property and equipment                  (96,578)      (28,989)
         Net cash (used in) provided by investing    (129,732)          241

CASH FLOWS FROM FINANCING ACTIVITIES:
  Margin accounts payable to broker-dealers          (145,740)      498,843
  Advances from affiliates                            131,530       333,153
  Advances to affiliates                             (274,864)     (311,277)
         Net cash (used in) provided by financing    (289,074)      520,719

NET DECREASE IN CASH                                  (41,787)     (310,859)

CASH, BEGINNING OF PERIOD                             160,426       405,338

CASH, END OF PERIOD                             $     118,639 $      94,479


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                                                        1997          1996
  Cash paid during the period for:
    Interest                                    $      40,180 $      20,056


The accompanying notes are an integral part of these consolidated financial 
statements.

                   THE BANC STOCK GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AUGUST 31, 1997

(1)  ORGANIZATION AND NATURE OF BUSINESS

The Banc Stock Group, Inc. (the Company), formerly, Heartland Group of 
Companies, Inc., is a Florida corporation incorporated in April, 1990.  At the 
Annual Meeting of Shareholders held on June 19, 1997, the Shareholders amended 
the Articles of Incorporation to change the name of the corporation to The Banc 
Stock Group, Inc.  The Company was organized for the purpose of investing in 
financial services companies (such as stock brokerage companies) as well as 
trading and investing in minority interests of independent bank stocks.  The 
Company has three wholly-owned subsidiary operating companies.
  
Banc Stock Financial Services, Inc. (BSFS), an Ohio corporation, is an NASD 
registered broker-dealer specializing in the trading of bank stocks nationwide.
BSFS is registered with the Securities  and Exchange Commission  and the 
securities commissions of seventeen states, including Ohio.  BSFS trades 
securities on a fully-disclosed basis and clears customer transactions 
through an unaffiliated broker-dealer which also maintains the customer 
accounts.  BSFS derives a significant portion of its revenues from providing 
private portfolio management and brokerage services.

Heartland Advisory Group, Inc. (HAG), is a registered investment advisor 
offering advisory accounts to qualified investors.  HAG is the Investment 
Advisor to The Banc Stock Group Fund, a diversified, open-end mutual fund.

Buckeye Bancstocks, Inc., is an Ohio corporation established in 1977, to act 
as an intrastate broker-dealer trading primarily in Ohio bank stocks.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and the reported 
amounts of revenues and expenses for the period.  Actual results could differ 
from those estimates.

The following is a summary of the Company's significant accounting policies:

Principles of Consolidation
     
The accompanying consolidated financial statements include the operations of 
the Company, BSFS, HAG and  Buckeye Bancstocks.  All intercompany transactions 
and balances have been eliminated in consolidation.

Cash

The Company has defined cash as demand deposits and money market accounts.

Valuation of Securities Owned

Bank securities and related options traded on national securities markets and 
securities not traded on national securities markets, but with readily 
ascertainable market values, are valued at market value.  Other bank securities
for which market quotations are not readily available, due to infrequency of 
transactions, are valued at fair value as determined in good faith by the 
management of the Company. Realized and unrealized gains and losses are 
included in principal transactions.

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation.  
Depreciation is calculated using the straight-line method over estimated lives 
of five to seven years.

Goodwill

The excess purchase price over the fair market value of the net assets acquired 
from Buckeye Bancstocks and BSFS is being amortized on a straight line basis 
over 20 years.

Revenues

Securities transactions and commissions are accounted for on the trade date 
basis.  Dividend income is recorded on the ex-dividend date and interest 
income is accrued as earned.  Realized gains and losses from sales of 
securities are determined utilizing the first-in, first-out method (FIFO).

Earnings Per Share

Primary and fully diluted earnings per common share were computed by dividing 
net income by the weighted average number of shares of common stock and common 
stock equivalents outstanding during the periods.

Recent Accounting Pronouncement

In February 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 128, "Earnings Per Share," which supersedes 
existing standards for determining earnings per share.  The statement will be 
effective for the Company for the year ending February 28, 1998.  Primary 
earnings per share will be replaced by "basic earnings per share," which will 
be determined solely by the weighted average number of shares outstanding for 
the period.  Fully diluted earnings per share will be replaced by "diluted 
earnings per share," which will reflect the potential dilution that could 
occur if securities or other contracts to issue common stock were exercised or 
converted into common stock or resulted in the issuance of common stock that 
then shared in the earnings of the Company.  The statement will also require 
a reconciliation of the numerator and denominator of basic earnings per share 
with the numerator and denominator of diluted earnings per share.  Management 
does not believe the new statement will result in a significant difference in 
amounts per share reported in these financial statements.  

Fair Value of Financial Instruments

Substantially all of the Company's financial instruments are carried at fair 
value or amounts approximating fair value.  Assets, including cash, accounts 
receivable, mortgage participation notes, notes and interest receivable and 
securities owned are carried at amounts which approximate fair value.  
Similarly, liabilities, including margin accounts payable to broker-dealers, 
accounts payable and accrued expenses are carried at amounts approximating 
fair value.

Equity Investment in Banc Stock Exchange of America

The Banc Stock Exchange of America (BSA) is establishing an electronic bank 
stock information service.  BSA is under common management with the Company.  
The Company currently holds 16% of the outstanding common stock of BSA.  The 
Company's investment in BSA is accounted for on the equity method.  The 
difference between the carrying amount of the investment accounted for under 
the equity method and the underlying equity in net assets results from the 
Company's policy of expensing pre-operating costs as incurred.
 
(3)  CAPITAL STOCK

Common Stock 

Class A Common shares have been registered with the Securities and Exchange 
Commission since  March 24, 1994.  Commencing December 1, 1991, shares of 
Class C common stock automatically convert to Class A common stock at the 
rate of 120,000 shares per year.  The Class C common shares are subordinate 
to Class A common stock in that Class A common stock has a liquidation 
preference over the Class C common stock equal to $1.50 per share.  In all 
other respects, Class A and Class C common stock have equal rights.
 
Treasury Stock

As of August 31, 1997, Buckeye Bancstocks held 206,240 Class A shares of the 
Company.  These shares are treated as treasury stock for financial reporting 
purposes.
     
Authorization of Preference Stock

The Company's Articles of Incorporation authorize the issuance of 50,000,000 
shares of "blank check" preference stock with such designations, rights and 
preferences as may be determined from time to time by the Company's Board of 
Directors.  The Board of Directors is empowered, without shareholder approval, 
to issue preference stock with dividend, liquidation, conversion, voting, or 
other rights which could adversely affect the voting or other rights of the 
holders of the common stock.  

(4)  SECURITIES OWNED

Marketable equity securities at August 31, 1997 consist of bank stocks at 
market value, as follows:

       Traded on national securities markets      		   $ 6,658,828
       Not traded on national securities               
         markets, but with readily ascertainable
         market value                              		 	   3,390,990

               Total marketable equity securities       $10,049,818

The Company, at any given time, may have a significant amount of its securities 
owned and related income generated from a few specific bank stocks.  As of 
August 31, 1997, the Company had no single investment representing more than 
10% of its marketable equity securities.

Securities not readily marketable include securities for which there is no 
market on a securities exchange and no independent publicly quoted market.  
These securities at August 31, 1997 were $797,974 at fair value with a cost 
of $657,198.  As of August 31, 1997, the Company had investments in one bank 
stock amounting to 63% of its not readily marketable securities.

(5)  MARGIN ACCOUNTS PAYABLE TO BROKER-DEALERS

The Company maintains margin account balances due to unaffiliated broker-
dealers bearing interest at variable rates which averaged 7.5% at August 31, 
1997.  These margin accounts are secured by the respective securities held by 
broker-dealers.  The market value of the securities held by broker-dealers 
with margin account balances was approximately $5,451,800 at August 31, 1997.

(6)  RELATED PARTY TRANSACTIONS

Securities Transactions

The Company purchases from and sells securities owned to BSA at the prevailing 
market price at the time of the transaction.  However, during the six months 
ended August 31, 1997 and 1996 no purchases were made from, nor sales made to, 
BSA.

Operating Expenses

The Company and BSA are under common management.  Certain expenses are paid by 
the Company and allocated to BSA based upon predetermined percentages as 
approved by the officers of the Companies.  Operating expenses in the 
allocation are primarily salaries and benefits.  Total expenses allocated to 
BSA were $71,578 and $40,006 for the six months ended August 31, 1997 and 
1996, respectively.

(7)  INCOME TAXES

The Company files a consolidated Federal income tax return.  It is the policy 
of the Parent to allocate the consolidated tax provision to subsidiaries as 
if each subsidiary's tax liability or benefit were determined on a separate 
company basis.  As part of the consolidated group, subsidiaries transfer to 
the Parent their current Federal tax liability or assets.
     
The provision for income taxes for the six months ended August 31, 1997 is 
composed of the following:

Current Federal income taxes					   $   -
Deferred Federal income taxes			 		  590,000
Change in valuation allowance					  (290,000)
Provision for income taxes					     $300,000  

Deferred tax assets and liabilities consist of the following at August 31, 1997:
      
Deferred tax benefit of NOL carryforward   		      $   950,000
Deferred tax liabilities on unrealized gains
    on securities owned                             (1,250,000)
Net deferred tax benefit			  			                      (300,000)
Valuation allowance			       	                            -       
Deferred taxes				      		                          $ (300,000) 

(8)  OPERATING LEASES

The Company leases certain facilities, a vehicle and office equipment under 
operating leases.  Total lease expenses were approximately $87,000 in fiscal 
year ended February 28, 1997.  As of August 31, 1997 the future minimum lease 
payments under existing leases are as follows:
                                          		Amount
                    		1998              $   96,600
                      1999		                99,200
                      2000		                88,200
                      2001		                92,500
                      2002		                94,300
                    		2003                  39,300
                                        	$ 510,100

(9) EMPLOYEE INCENTIVE PLANS

Incentive Compensation Plan

All full-time executive employees of the Company are eligible to participate 
in the Heartland Incentive Compensation Plan.  The Plan provides that a bonus 
fund will be established in an amount equal to 20% of the pre-tax realized 
profits of the Company in excess of a 15% pre-tax return on equity.  The 
amount of the bonus fund is calculated each fiscal quarter on a cumulative 
basis.  The allocation of the bonus fund is to be made by the President of the 
Company.  The Company incurred an expense of $93,000 under the Plan for the 
year ended February 28, 1997 and has provided $195,000 for the six months 
ended August 31, 1997.

Stock Option Plan

The Company has a Non-Qualified and Incentive Stock Option Plan which 
authorizes the grant of options to purchase an aggregate of 1,000,000 shares 
of the Company's Class A Common Stock.  The Plan provides that the Board of 
Directors, or a committee appointed by the Board, may grant options and 
otherwise administer the Option Plan.  The exercise price of each incentive 
stock option or non-qualified stock option must be at least 100% of the fair 
market value of the Class A Shares at the date of grant, and no such option 
may be exercisable for more than 10 years after the date of grant.  However, 
the exercise price of each incentive stock option granted to any shareholder 
possessing more than 10% of the combined voting power of all classes of 
capital stock of the Company on the date of grant must not be less than 110% 
of the fair market value on that date, and no such option may be exercisable 
more than 5 years after the date of grant.

Effective September 28, 1995, the following options and warrants were granted 
under this plan with a ten year term and exercise price of $2.875.

(a)  154,000 non-qualified stock options granted to employees with immediate 
vesting.

(b)  55,000 non-qualified stock options granted to brokers with immediate 
vesting.

(c)  145,000 non-qualified stock options granted to brokers, vesting over 
five years.

(d)  121,000 qualified stock options granted to employees, vesting over five 
years.

(e)  105,000 warrants granted to directors and an officer with immediate 
vesting.

Effective February 29,  1996, 25,000 options were granted under this plan to 
the President of the Company with a ten year term and exercise price of $2.875.

Effective March 7, 1997, the following options and warrants were granted under 
this plan with a ten year term and exercise price of $2.125.

(a)  61,000 non-qualified stock options granted to employees with immediate 
vesting.

(b)  47,500 non-qualified stock options granted to brokers with immediate 
vesting.

(c)  32,500 non-qualified stock options granted to brokers, vesting over five 
years.

(d)  61,000 qualified stock options granted to employees, vesting over five 
years.

(e)  65,000 warrants granted to directors and an officer with immediate vesting.

Effective May 4,  1997, 7,500 options which vest immediately and 7,500 options 
which vest over five years, were granted under this plan to an employee  with 
a ten year term and exercise price of $2.375.  

The Company applies Accounting Principles Board Opinion 25 and related 
Interpretations in accounting for its plans.  Accordingly, no compensation 
cost has been recognized for its fixed stock option plans and warrants.  Had 
compensation cost for the Company's  stock-based compensation plans been 
determined based on the fair value , as computed in accordance with Statement 
of Financial Accounting Standards No. 123 (FAS 123), at the grant dates for 
awards under those plans, the Company's net income and earning per share would 
have been reduced to the pro forma amounts indicated below:

   								    				                                 Six Months Ended
 	                                           August 31, 1997   August 31, 1996
Net income			               As reported	      $ 1,422,459	           $ 530,009
                            Pro forma		       $ 1,029,250		          $ 437,437

Primary  and fully diluted
   earnings per share		     As reported		     $ 0.17			              $ 0.06
                            Pro forma		       $ 0.12			              $ 0.05

To make the computations of pro forma results under FAS 123, the fair value of 
each option grant is estimated on the date of grant using the Black-Scholes 
option-pricing model with the following weighted-average assumptions: no 
dividend yield for all years; expected volatility of 31.5% and 61%; and 
expected lives of ten years.  The assumed risk-free interest rates for the 
September 28, 1995 grants is 5.83%;  6.79% for the February 29, 1996 grant; 
7.03% for the March 7, 1997 grants; and 6.82% for the May 4, 1997 grants.  
The options and warrants granted under these plans are not registered and 
accordingly, there is no quoted market price.

A summary of the status of the Company's stock option and warrants plans as of 
August 31, 1997  and changes during the six months then ended is presented 
below:

          Options                     Warrants               
Exercise		 Exercise
                                Shares  	 Price      Shares  	  Price     
Outstanding March 1,  1997			   480,000	  $2.875     105,000	   $2.875
Granted					                    232,000	  $2.141      65,000    $2.125
Outstanding August 31, 1997 		  712,000	  $2.636     170,000    $2.588


Exercisable August 31, 1997			  395,200	  $2.660     170,000    $2.588

Weighted-average fair value
   of options and warrants
   granted during the six months,	
   computed in accordance 
   with FAS 123						                     $1.651		  

The following table summarizes information about fixed stock options and 
warrants outstanding at August 31, 1997:

                                       Options         		Warrants         
Number outstanding				                 712,000		         170,000
Weighted-average remaining
   contractual life in years			               8.55		            8.63
Weighted-average exercise price		            $2.660	           $2.588
Number exercisable		  		               395,200		         170,000

(10)  REGULATORY REQUIREMENTS

BSFS is subject to the uniform net capital rule of the Securities and Exchange 
Commission (Rule 15c3-1), which requires that the ratio of "aggregate  
indebtedness" to "net capital" not exceed 15 to 1 (as those terms are defined 
by the Rule).  BSFS had net capital of $883,243 as of August 31, 1997, which 
was in excess of its required minimum net capital of $100,000.  The  ratio of 
aggregate indebtedness to net capital was .52 to 1 as of August 31, 1997.  
BSFS is also subject to regulations of the District of Columbia and twenty 
states in which it is registered as a licensed broker-dealer.  

Buckeye Bancstocks is required by the Ohio Division of Securities to maintain 
an "allowable net worth" of $25,000.  The Company has guaranteed this 
allowable net worth.

HAG is a Registered Investment Advisor and is subject to regulation by the SEC 
pursuant to the Investment Advisors Act of 1940.

(11) CONCENTRATIONS OF CREDIT RISK AND FINANCIAL INSTRUMENTS WITH 
         OFF-BALANCE SHEET RISK

The Company's NASD broker-dealer subsidiary under the correspondent agreement 
with its clearing broker, has agreed to indemnify the clearing broker from 
damages or losses resulting from customer transactions.  The Company is, 
therefore, exposed to off-balance sheet risk of loss in the event that 
customers are unable to fulfill contractual obligations.  The Company manages 
this risk by requiring customers to have sufficient cash in their account 
before a buy order is executed and to have the subject securities in their 
account before a sell order is executed.  The Company has not incurred any 
losses from customers unable to fulfill contractual obligations.

In the normal course of business, the Company periodically sells securities 
not yet purchased (short sales) for its own account and writes options.  The 
establishment of short positions and option contracts expose the Company to 
off-balance sheet market risks in the event prices change, as the Company may 
be obligated to cover such positions at a loss. At August 31, 1997, the 
Company had no short security positions, the Company had not written any 
option contracts and did not own any options. The Company did not experience 
any credit losses due to the failure of any counterparties to perform during 
the six months ended August 31, 1997.  Senior management of the Company is 
responsible for reviewing trading positions, exposures, profits and losses, 
trading strategies and hedging strategies on a daily basis.

The Company's significant industry concentrations, which arises within its 
normal course of business activities, is with financial institutions for bank 
securities transactions.

ITEM 2:	Management's Discussion and Analysis of Financial Condition and 
Results of Operations

Six Months Ended August 31, 1997, Compared to the Six Months Ended August 31, 
1996

Revenues for the six months ended August 31, 1997 increased to $3,282,540 
compared to $1,525,649 for the six months ended August 31, 1996, an increase 
of 115%.  This increase results primarily from increases in revenue from 
principal transactions.  

Revenues from principal transactions involving the trading portfolio were 
$2,291,974 for the six months ended August 31, 1997 compared to $762,938 for 
the six months ended August 31, 1996, an increase of 200%.  This represents 
an annual rate of return on the average portfolio of 45% for the six months 
ended August 31, 1997 compared to 22% for the six months ended August 31, 
1996 due to increases in market values.

Banc Stock Financial Services, Inc. (BSFS), the Company's NASD broker-dealer 
subsidiary, generated commission revenue of $888,396 for the six months ended 
August 31, 1997 compared to $663,683 for the six months ended August 31, 1996, 
an increase of 34%.  BSFS continues to make a concerted effort to increase its 
level of business activity, especially portfolio management services.

Buckeye Bancstocks, the Company's intrastate broker-dealer subsidiary, 
generated agency fees of $14,270 for the six months ended August 31, 1996.  
These funds were earned by Buckeye in its capacity as agent for investors 
desiring to acquire BSA stock or shareholders desiring to sell their BSA 
shares.  As an agent, Buckeye matched corresponding buyers or sellers.  There 
were no comparable fees for the six months ended August 31, 1997.  Buckeye 
does not expect to generate significant agency fees in the foreseeable future.

Operating expenses for the six months ended August 31, 1997 increased to 
$1,596,931 compared to $999,610 for the six months ended August 31, 1996, an 
increase of 60%.  Brokers' commission expenses increased to $507,803 for the 
six months ended August 31, 1997 compared to $357,264 for the six months ended 
August 31, 1996, an increase of 42%.  This increase reflects management's 
decision to increase commissions paid to brokers to provide incentives to 
increase the level of business activity.  Salaries, benefits, and payroll 
taxes increased to $491,081 for the six months ended August 31, 1997 compared 
to $185,145 for the six months ended August 31, 1996, an increase of 165%.  
This increase reflects accruals for the Incentive Compensation Plan for 
employees and management's decision to add three additional employees to 
establish additional revenue sources in the future.  Interest expense increased 
to $40,180 for the six months ended August 31, 1997 compared to $20,056 for the 
six months ended August 31, 1996, an increase of 100%.  This increase results 
from additional margin positions with broker-dealers established to buy 
additional securities to take advantage of favorable market conditions.  
General and administrative expenses increased to $557,867 for the six months 
ended August 31, 1997 compared to $437,145 for the six months ended August 31, 
1996, an increase of 27%.  This increase is primarily the result of marketing 
costs incurred to launch The Banc Stock Group Fund, a mutual fund investing in 
community bank stocks, which is sponsored by a subsidiary of the Company and 
was launched August 1, 1997.

The Banc Stock Exchange of America, Inc. (BSA) has established an electronic 
bank stock information service.  BSA is separately owned but under common 
management with the Company.  The Company currently holds 16% of the 
outstanding common stock of BSA.  The Company's investment in BSA is accounted 
for on the equity method.  Equity in BSA's earnings was $36,850 for the six 
months ended August 31, 1997 compared to $3,970 for the six months ended 
August 31, 1996.  BSA was a development stage enterprise through February 28, 
1997, however, operations began March 1, 1997.

Quarter Ended August 31, 1997, Compared to the Quarter Ended August 31, 1996

Revenues for the quarter ended August 31, 1997 increased to $2,129,623 
compared to $855,822 for the quarter ended August 31, 1996, an increase of 
149%.  This increase results primarily from increases in revenue from 
principal transactions.  

Revenues from principal transactions involving the trading portfolio were 
$1,456,648 for the quarter ended August 31, 1997 compared to $362,155 for the 
quarter ended August 31, 1996, an increase of 302%.  This represents an annual 
rate of return on the average portfolio of 55% for the quarter ended August 31, 
1997 compared to 20% for the quarter ended August 31, 1996 due to increases 
in market values.

Banc Stock Financial Services, Inc. (BSFS), the Company's NASD broker-dealer 
subsidiary, generated commission revenue of $618,218 for the quarter ended 
August 31, 1997 compared to $425,643 for the quarter ended August 31, 1996, 
an increase of 45%.  BSFS continues to make a concerted effort to increase its 
level of business activity, especially portfolio management services.

Buckeye Bancstocks, the Company's intrastate broker-dealer subsidiary, 
generated agency fees of $14,270 for the quarter ended August 31, 1996.  These 
funds were earned by Buckeye in its capacity as agent for investors desiring 
to acquire BSA stock or shareholders desiring to sell their BSA shares.  As an 
agent, Buckeye matched corresponding buyers or sellers.  There were no 
comparable fees for the quarter ended August 31, 1997.  Buckeye does not 
expect to generate significant agency fees in the foreseeable future. 

Operating expenses for the quarter ended August 31, 1997 increased to $994,251 
compared to $583,969 for the quarter ended August 31, 1996, an increase of 70%. 
Brokers' commission expenses increased to $314,572 for the quarter ended 
August 31, 1997 compared to $236,770 for the quarter ended August 31, 1996, an 
increase of 33%.  This increase reflects the increase in the level of 
business activity.  Salaries, benefits, and payroll taxes increased to 
$367,512 for the quarter ended August 31, 1997 compared to $89,475 for the 
quarter ended August 31, 1996, an increase of 311%.  This increase reflects 
accruals for the Incentive Compensation Plan for employees and management's 
decision to add three additional employees to establish additional revenue 
sources in the future.  Interest expense increased to $19,375 for the quarter 
ended August 31, 1997 compared to $13,749 for the quarter ended August 31, 1996,
an increase of 41%.  This increase results from additional margin positions 
with broker-dealers established to buy additional securities to take advantage 
of favorable market conditions.  General and administrative expenses increased 
to $292,792 for the quarter ended August 31, 1997 compared to $243,975 for the 
quarter ended August 31, 1996, an increase of 20%.  This increase is primarily 
the result of marketing costs incurred to launch The Banc Stock Group Fund, a 
mutual fund investing in community bank stocks, which is sponsored by a 
subsidiary of the Company and was launched August 1, 1997.

The Banc Stock Exchange of America, Inc. (BSA) has established an electronic 
bank stock information service.  BSA is separately owned but under common 
management with the Company.  The Company currently holds 16% of the 
outstanding common stock of BSA.  The Company's investment in BSA is accounted 
for on the equity method.  Equity in BSA's earnings was $25,770 for the 
quarter ended August 31, 1997 compared to $6,900 for the quarter ended August 
31, 1996.  BSA was a development stage enterprise through February 28, 1997,
however, operations began March 1, 1997.

Liquidity and Capital Resources

Approximately 7% of the value of the Company's trading portfolio is comprised 
of small bank stocks which are thinly traded and there can be no assurance 
that active markets will develop.  The failure of such markets to develop 
could negatively affect the Company's operations and financial condition.  
Approximately 93% of the Company's trading portfolio is readily marketable, 
providing a high degree of liquidity.  Investments in bank securities traded 
on national securities markets and securities not traded are valued at fair 
value as determined in good faith by management of the Company.  While 
management employs objective criteria to ascertain these values, there is no 
independent benchmark by which the values assigned by management can be judged.

As of August 31, 1997 the Company had working capital of approximately 
$9,990,000 compared to approximately $7,730,000 as of August 31, 1996.  
Working capital includes cash, securities owned and accounts and notes 
receivable, net of all current liabilities.  The Company has no long term debt.

The Company's NASD broker-dealer subsidiary under the correspondent agreement 
with its clearing broker, has agreed to indemnify the clearing broker from 
damages or losses resulting from customer transactions.  The Company is, 
therefore, exposed to off-balance sheet risk of loss in the event that 
customers are unable to fulfill contractual obligations.  The Company manages 
this risk by requiring customers to have sufficient cash in their account 
before a buy order is executed and to have the subject securities in their 
account before a sell order is executed.  The Company has not incurred any 
losses from customers unable to fulfill contractual obligations.

In the normal course of business, the Company periodically sells securities 
not yet purchased (short sales) for its own account and writes options.  The 
establishment of short positions and option contracts expose the Company to 
off-balance sheet market risks in the event prices change, as the Company may 
be obligated to cover such positions at a loss.

At August 31, 1997 the Company had no short security positions.  Short 
security positions do not expose the Company to credit risk since the 
counterparty is not obligated to perform.

At August 31, 1997 the Company had not written any option contracts.  Short 
option positions do not expose the Company to credit risk since the 
counterparty is not obligated to perform.

The Company did not own any options as of August 31, 1997.  The Company did 
not experience any credit losses due to the failure of any counterparties to 
perform during the six months ended August 31, 1997.  Senior management of the 
Company is responsible for reviewing trading positions, exposures, profits and 
losses, trading strategies and hedging strategies on a daily basis.

The Company's most significant industry concentration, which arises within its 
normal course of business activities, is with financial institutions for bank 
securities transactions.

Historically, the operations of the Company have been funded by returns on 
investments, raising of capital, and limited bank financing.  Management 
believes that the Company's existing resources, including available cash and 
cash provided by operating activities, will be sufficient to satisfy its 
working capital requirements in the foreseeable future.  However, no assurance 
can be given that additional funds will not be required.  To the extent that 
returns on investments are less than or expenses are greater than anticipated, 
the Company may be required to reduce its activities, liquidate inventory or 
seek additional financing.  This financing may not be available on acceptable 
terms, if at all.  No significant capital expenditures are expected in the 
foreseeable future, however, the Company moved its offices during the second 
fiscal quarter.  The cost of this move was approximately $75,000 and the new 
space will increase annual lease cost approximately 12%.  The new space is 
approximately 25% larger than the previous space.  Working capital was used to 
fund these expenditures.

Impact of Inflation and Other Factors

The Company's operations have not been significantly affected by inflation.  
The Revenue Reconciliation Act of 1993 includes Mark-to-Market Rules which 
essentially require dealers in securities to include unrealized gains on the 
trading portfolio, in taxable income for income tax purposes.  The Revenue 
Reconciliation Act of 1993 was effective for the Company's tax year beginning 
March 1, 1993.  Securities held for investment rather than inventory are not 
subject to the Mark-to-Market Rules.  In light of the Company's net operating 
loss carried forward, the Mark-to-Market Rules currently are not expected to 
have a significant impact on operations.  However, after the net operating 
loss carried forward, currently available to the Company, is fully utilized, 
these Rules could have a materially adverse impact on the Company's cash flow.

            	THE BANC STOCK GROUP, INC. AND SUBSIDIARIES

                               	PART II

                          	OTHER INFORMATION

Item 1.  Legal Proceedings - 					            None

Item 2.  Changes in Securities - 				         None

Item 3.  Defaults Upon Senior Securities - 			None

Item 4.  Submission of Matters to a Vote of
   Security Holders -								

The Annual Meeting of Shareholders was held June 19, 1997.  The Shareholders 
voted on the following issues:

a.	The Shareholders amended the Articles of Incorporation to change the name 
of the corporation to The Banc Stock Group, Inc.  This issue was approved with 
7,575,580 votes for, 52,671 votes against and 783,473 votes withheld. 	

b.	The Shareholders amended the By-Laws to provide that the Board of Directors 
shall be divided into three classes with staggered three year terms so that one 
class is subject to election at each annual meeting of the shareholders.  This 
issue was approved with 5,620,007 votes for, 31,935 votes against and 16,350 
votes withheld. 	

c.	Election of the Board of Directors. The following individuals were elected 
to serve on the board:

                      Term
Name of Director		  Expires		Votes for	  Votes withheld
Larry A. Beres		      2000			7,833,676			18,208
Robert K. Butner		    1999			7,830,176			21,208
Michael E. Guirlinger	2000			7,832,676			19,208
James G. Mathias		    2000			7,833,676			18,208
Sandra L. Quinn		     1999			7,832,676			19,208
J. David Smith		      1998			7,833,676			18,208
Harvey Thatcher		     1999			7,833,676		 18,208  	
L. Jean Thiergartner	 1998			7,802,363			49,521

d.	The election of Price Waterhouse LLP to serve as independent accountants.  
This issue was approved with 7,786,662 votes for, zero votes against and 
42,242 votes withheld. 


Item 5.  Other Information - 					            None

Item 6.  Exhibits and Reports on Form 8-K
  a)  Furnish the exhibits required by 
       Item 601 of Regulation S-B - 			       None

  b)  Reports on Form 8-K - 				              None

                             	SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused 
this report to be signed on its behalf by the undersigned, thereunto duly 
authorized.

                      THE BANC STOCK GROUP, INC.
                             (Registrant)


Date     October 14, 1997               			/S/ Michael E. Guirlinger           
                                           Michael E. Guirlinger
                                           President, Treasurer and 
                                           Chief	Executive Officer




Date     October 14, 1997              			 /S/ Jeffrey C. Barton             
                                           Jeffrey C. Barton
                                           Chief Financial Officer

                        	Financial Data Schedule
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>
						               
<ARTICLE>				             	BD
<LEGEND>					              0
<RESTATED>					            
<CIK>						                0
<NAME>						               0
<MULTIPLIER>					          1
<CURRENCY>					            U.S. DOLLARS
<PERIOD-START>				         JUN-01-1997
<PERIOD-TYPE>					         6-MOS
<FISCAL-YEAR-END>				      FEB-28-1998
<PERIOD-END>					          AUG-31-1997
<EXCHANGE-RATE>				        1
<CASH>						               118,639
<RECEIVABLES>					         312,686
<SECURITIES-RESALE>			     0
<SECURITIES-BORROWED>			   0
<INSTRUMENTS-OWNED>			     10,947,792
<PP&E>						               165,194
<TOTAL-ASSETS>				         12,704,268
<SHORT-TERM>					          0
<PAYABLES>					            632,559
<REPOS-SOLD>					          0
<SECURITIES-LOANED>			     0
<INSTRUMENTS-SOLD>			      0
<LONG-TERM>					           0
			   0
					           0
<COMMON>					              8,717,153
<OTHER-SE>					            2,296,957
[TOTAL-LIABILITIES-AND-EQUITY]		12,704,268
<TRADING-REVENUE>				      2,291,974
<INTEREST-DIVIDENDS>			    102,170
<COMMISSIONS>				          380,210
<INVESTMENT-BANKING-REVENUES>	0
<FEE-REVENUE>					         508,186
<INTEREST-EXPENSE>				     40,180
<COMPENSATION>				         491,081				
<INCOME-PRETAX>				        1,685,609
<INCOME-PRE-EXTRAORDINARY>	1,685,609
<EXTRAORDINARY>				        0
<CHANGES>					             0
<NET-INCOME>					          1,422,459
<EPS-PRIMARY>					         .17
<EPS-DILUTED>					         .17

</TABLE>


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